A Note on Incentive Design

Thoughts from Vaughn Tan regarding building incentive design as a study.
Aug 6, 2023
  1. Theoretical distinctiveness is crucial. Creating a new academic discipline (vs a branch of another academic discipline) requires clearly articulated theoretical underpinnings that are distinct from those of other disciplines. Methodologies or content areas can overlap, but theoretical foundations need to be defensibly different to justify separation. At the moment, it seems possible but not evidently true (to me) that ID has a distinctive theoretical base that is not shared by various forms of agency theory in economics or sociology.
  1. ID is necessarily a dynamic and reflective discipline. ID is an intentional intervention into social systems to modify the behavior of humans in a system so that the overall system also changes. Because humans learn from the systems they are embedded in, one of the effects of any incentive is to change how the incentive works (by changing the system in which the incentive is introduced). The design and implementation of incentives must take this into account.
  1. Areas of focus for ID as a discipline:
    1. [Fundamentally important] Theoretical foundations of ID. What are the general underlying mechanisms by which incentives work? These will likely be informed by theory from cognitive neuroscience, experimental psychology, sociology.
    2. [Fundamentally important] Normative ethics of ID. How should we think about when we should (or should not) use incentives? My own very strongly held view is that it is essential to developing an ID ethics alongside ID theory, methodologies, and deployment expertise — not waiting for the tools to be in market before thinking about ethics of use.
    3. Methodologies for research and analysis. What are the tools for operationalizing ID theory for empirical research? These will likely be borrowed from economics (contract theory), sociology (social policy analysis), social psychology.
    4. Content areas for deployment. How is the application of ID the same or different in different deployment contexts (e.g., a small nonprofit org vs a large for-profit org vs a society)?
  1. Creating a discipline is primarily a political exercise. A distinct academic discipline emerges slowly, as its members gradually find each other based on a shared dependence on the same theoretical foundation. Over time, the influence of that shared theoretical foundation grows and creates an infrastructure for influence and production of knowledge (conferences, journals, departments, PhD students).
    1. Creating a discipline by force of will (vs allowing a discipline to emerge) is both an academic exercise and a political exercise. The correct leader for ID as a discipline will probably need to be an academic political animal first and primarily. The three main things that will have to be done to create a discipline are all very high-lift in terms of political capital and sophistication:
      1. Convening conferences that high-reputation academics attend. This is hard but probably manageable with funding within a 3-5 year timeline because even academics like boondoggles.
      2. Creating journals that high-reputation academics publish in. This is very hard to do. Might be possible after a small conference of very high-reputation researchers with a high-impact edited volume of papers that shows the distinctiveness of ID’s theoretical foundations. The main hurdle will be in having the ID journals immediately have high impact factor.
      3. Creating tenure lines that spawn genealogies of researchers via PhD programs. This is particularly challenging in time and sequencing. Tenure lines will likely have to originate inside existing disciplines until there are enough disciplinary ID faculty to create standalone departments. This is almost unavoidably a multi-decade project.
  1. The political leader for ID will likely have to be involved in developing the distinctive theoretical foundations of ID (vs being brought in at a much later stage after the theoretical foundations have been solidified).